U.S. Groups Press China Over Piracy

By CHRIS BUCKLEY

Published: September 17, 2004

It looks like the edition of Bill Clinton's memoirs in American bookstores. It is in English, has a glossy cover with the same photo of the tanned, smiling former president, the same bronze-tinted title, and a spine announcing its publisher to be Knopf.

But the shrunken print, tissue-thin paper and smeared black-and-white photographs inside betray its true identity -- a pirated copy of the former president's book, ''My Life,'' printed just weeks after the original appeared in the United States, and sold by roadside hawkers for as little as $5.

The book retails for $35 in the United States.

The bootlegging is another example of the widespread defiance of copyrights and patents here, a problem that two leading American business groups said on Thursday threatened to chill American trade with China.

In an otherwise encouraging annual report on American business in China released on Thursday, the American Chamber of Commerce in China singled out lax protection of intellectual property rights as the Achilles' heel that might cripple investor confidence.

''There's virtually no enforcement'' of intellectual property rights in China, Charles Martin, president of the chamber, said at a news conference. ''It's worsening, and there's now a flood of counterfeit exports.''

Myron Brilliant, a vice president of the United States Chamber of Commerce in Washington, said his organization's annual report on China, to be released next week, would also single out intellectual property abuses as a major threat to American businesses.

''We see ourselves as friends of China, but our patience has its limits,'' Mr. Brilliant said in an interview. ''The time is ticking for China on this front.'' Mr. Brilliant is in Beijing this week to press Chinese officials for stronger protection of industrial designs, patents and commercial secrets.

Violations of intellectual property rights have long irked Americans doing business in China, but both organizations emphasized that their members' impatience over the problem had reached new heights. Mr. Brilliant said top executives often raised the issue with him.

''That's a sea change,'' he said. ''Before, this was just an issue for Hong Kong and China reps, but now it's the C.E.O.'s of major companies who are complaining to us.''

Business executives said two recent decisions by the Chinese government particularly threatened to damp the enthusiasm of international investors.

One was a decision by China's patent office to override Pfizer's patent for its best-selling impotence drug, Viagra, arguing that the original patent did not adequately explain the drug's technical uses.

That was followed by the Ministry of Commerce's dismissal of a complaint that General Motors had lodged against a Chinese carmaker, SAIC Chery Automobile, which makes a car strikingly similar to G.M.'s Spark.

Other United States companies that have complained about flagrant copying of their products are in industries like software, cigarettes, luxury goods and vehicle parts. And growing numbers of the pirated goods are being imported into the United States, business representatives said.

The ease with which industrial secrets are stolen is putting a ceiling on American investment in China by deterring investment in more sophisticated fields of manufacturing and research, Mr. Martin said.

The China-based chamber's survey of its members found that although most were generally confident of their business prospects in China, 90 percent believed that the Chinese government's protections of intellectual property were ineffective, and more than three-quarters said their business was hurt by the problem.

Michael Byrne, the chief China representative of Rockwell Automation, a company based in Milwaukee that specializes in machine control, said that China's treatment of intellectual property ''is moving in the right direction, but it's not moving fast enough or deep enough.''

''It hasn't deterred us,'' he said, ''but it's made us more cautious.''

The reports from both chambers of commerce did say that China has made marked progress in the last year in opening up its markets to international investors and clarifying commercial rules.

Last year, American businesses invested more than $4 billion in the country. But America's trade deficit with China has swelled, reaching $39 billion in the first seven months of 2004, according to Chinese customs statistics.

The trade gap is likely to cause American trade officials and businesses to push for faster and more decisive action from China, including harsher criminal penalties for bootleggers and speedier court injunctions against manufacturers of pirated goods.

If protections are not improved, Mr. Brilliant said, his organization may ultimately press for government legal action under United States trade law and China's commitments to the World Trade Organization.

''We're getting a lot of pressure from American business,'' he said. ''Time is running out and we have to see movement this year.''

The United States Chamber of Commerce is opening an office in Beijing to monitor China's efforts on intellectual property, and is working with Japanese and European business groups to press China on the issue.

As for the hawker selling President Clinton's memoirs opposite the World Trade Center in Beijing, he gave only his surname, Li, and said he could not read English and had never heard of a more recent political best seller, Kitty Kelley's book on the Bush family.

But he said he was sure that pirated copies would be available soon.

''If it's that popular,'' he said, ''then wait a few weeks and come around here and find me.''

Photo: Pirated copies of Bill Clinton's memoir, ''My Life,'' are widely available in China. American businesses are protesting such piracy. (Photo by Associated Press)